Budget deficit shrinks to five-year low

House Majority Leader Eric Cantor (R-Va.) recently appeared on Fox News and when the discussion turned to the budget, the Virginia Republican said lawmakers should be “focused on trying to deal with the ultimate problem, which is this growing deficit.”

In reality, the deficit is not growing; it’s shrinking. The AP reported this afternoon:

For the first time in five years, the U.S. government has run a budget deficit below $1 trillion.

The government says the deficit for the 2013 budget year totaled $680.3 billion, down from $1.09 trillion in 2012. That’s the smallest imbalance since 2008, when the government ran a $458.6 billion deficit.

This isn’t a surprising, at least not to the policy mainstream. Many congressional Republicans predicted tax increases on the wealthy that began in January would fail to lower the deficit, but as is usually the case, the opposite happened. The combination of new tax revenue and reduced spending did what exactly what was expected – it reduced the nation’s budget shortfall.

While this shouldn’t surprise anyone, the trend is a well-kept secret – national polling last year found that only 6% of Americans realize that the deficit is shrinking in the Obama era. Whether the public realizes it or not, the facts are not in dispute – the deficit is now down $400 billion from last year, and down nearly $800 billion from when President Obama took office.

Just so we’re clear, I don’t consider this good news. On the contrary, I strongly believe the nation should be borrowing more, not less, taking advantage of low interest rates, investing heavily in infrastructure, creating millions of jobs, and leaving deficit reduction for another day.

That said, if we’re going to have a fiscal debate, it should be rooted in reality, not silly misconceptions. And the reality is, we’re witnessing deficit reduction at a remarkable clip.